Question 1

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

Accepted Answer

A) True 
 B)False

Question 2

Because the direct method of preparing the statement of cash flows starts with net income,it is the method most frequently used.

Accepted Answer

A) True 
 B)False

Question 3

When preparing the operating activities section of the statement of cash flows using the indirect method,decreases in current operating liabilities are added back to net income.

Accepted Answer

A) True 
 B)False

Question 4

In preparing a company's statement of cash flows for the most recent year,Jeffers Corp.reported the following information:  
Net cash flows from financing activities for the year were:

Accepted Answer

A) $230,000 of net cash used. 
B) $230,000 of net cash provided. 
C) $108,000 of net cash used. 
D) $138,000 of net cash used. 
E) $138,000 of net cash provided. 
A) $230,000 of net cash used. 
B) $230,000 of net cash provided. 
C) $108,000 of net cash used. 
D) $138,000 of net cash used. 
E) $138,000 of net cash provided.

Question 5

Victoria reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Net cash flows from operations were $2,204 million.Calculate the cash flow on total assets ratio.

Accepted Answer

Cash Flow on Total Assets = Ca

Question 6

To be classified as a cash equivalent,the only criterion an item must meet is that it must be readily convertible to a liquid asset.

Accepted Answer

A) True 
 B)False

Question 7

Ford Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $150,000 was sold for its book value in Year 2.There were no other equipment purchases or sales during the year.The following selected information is available for Ford Company from its comparative balance sheet.
 
-Compute the cash received from the sale of the equipment.

Accepted Answer

A) $23,000. 
B) $35,000. 
C) $38,000. 
D) $40,000. 
E) $67,000. 
A) $23,000. 
B) $35,000. 
C) $38,000. 
D) $40,000. 
E) $67,000.

Question 8

An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?

Accepted Answer

A) The retirement of debt by issuing equity stock. 
B) A transaction exchanging cash equivalents for cash. 
C) The leasing of assets in a long-term lease transaction. 
D) The purchase of noncash assets in exchange for equity or debt securities. 
E) The purchase of long-term assets financed by issuing a note or bond. 
A) The retirement of debt by issuing equity stock. 
B) A transaction exchanging cash equivalents for cash. 
C) The leasing of assets in a long-term lease transaction. 
D) The purchase of noncash assets in exchange for equity or debt securities. 
E) The purchase of long-term assets financed by issuing a note or bond.

Question 9

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers,including expenditures related to administering the business,are classified as:

Accepted Answer

A) Financing activities. 
B) Investing activities. 
C) Operating activities. 
D) Direct activities. 
E) Indirect activities. 
A) Financing activities. 
B) Investing activities. 
C) Operating activities. 
D) Direct activities. 
E) Indirect activities.

Question 10

Which of the following is included in the cash flows from financing activities section of the statement of cash flows?

Accepted Answer

A) Interest revenue. 
B) Sale of equipment. 
C) Interest expense. 
D) Purchase of treasury stock. 
E) Purchase of stock in another company. 
A) Interest revenue. 
B) Sale of equipment. 
C) Interest expense. 
D) Purchase of treasury stock. 
E) Purchase of stock in another company.

Question 11

Use the following income statement and information about selected current assets and current liabilities for Kimberline Industries to calculate the net cash provided or used by operating activities using the indirect method.
   Increases and decreases of current asset and current liability accounts,all of which relate to operating activities,are as follows:

Accepted Answer

Cash flows

Question 12

Financing activities include receiving cash from issuing debt and paying cash dividends to shareholders.

Accepted Answer

A) True 
 B)False

Question 13

Computing operating cash flows by adjusting accrual-based net income is done when the ________ method is used.

Accepted Answer

The answer of Computing operating cash flows by adjusting accrual-based...

Question 14

Northeast Inc.is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information:
 
-Determine the amount of cash flows from operating activities using the indirect method:

Accepted Answer

A) $332,200. 
B) $236,800. 
C) $261,400. 
D) $186,800. 
E) $189,400. 
A) $332,200. 
B) $236,800. 
C) $261,400. 
D) $186,800. 
E) $189,400.

Question 15

When preparing the operating activities section of the statement of cash flows using the indirect method,depreciation is added back to net income.

Accepted Answer

A) True 
 B)False

Question 16

The purchase of a long-term asset using a long-term note payable is an example of a noncash investing and financing activity,which should be disclosed in a note or separate schedule.

Accepted Answer

A) True 
 B)False

Question 17

Cash flows from collections on credit sales are usually reported in the statement of cash flows as part of:

Accepted Answer

A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Noncash activities. 
E) This is not reported in the statement of cash flows. 
A) Operating activities. 
B) Financing activities. 
C) Investing activities. 
D) Noncash activities. 
E) This is not reported in the statement of cash flows.

Question 18

All of the following are true regarding the statement of cash flows except:

Accepted Answer

A) Operating activities include transactions and events that affect net income. 
B) Financing activities include transactions that affect long-term liabilities and equity. 
C) Investing activities include transactions that affect issuance of common stock. 
D) Investing activities include transactions and events that come from the purchase and sale of long-term assets. 
E) Noncash activities are investing and financing activities that do not affect cash flows. 
A) Operating activities include transactions and events that affect net income. 
B) Financing activities include transactions that affect long-term liabilities and equity. 
C) Investing activities include transactions that affect issuance of common stock. 
D) Investing activities include transactions and events that come from the purchase and sale of long-term assets. 
E) Noncash activities are investing and financing activities that do not affect cash flows.

Question 19

Rowan,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method.

Accepted Answer

The answer of Rowan,Inc.'s,income statement is shown below.Based on this...

Question 20

Citi Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:   The amount of cash paid for dividends was:

Accepted Answer

A) $44,000. 
B) $40,000. 
C) $57,000. 
D) $53,000. 
E) $36,000. 
A) $44,000. 
B) $40,000. 
C) $57,000. 
D) $53,000. 
E) $36,000.

Exam 12: Reporting Cash Flows

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

Because the direct method of preparing the statement of cash flows starts with net income,it is the method most frequently used.

When preparing the operating activities section of the statement of cash flows using the indirect method,decreases in current operating liabilities are added back to net income.

In preparing a company's statement of cash flows for the most recent year,Jeffers Corp.reported the following information: Net cash flows from financing activities for the year were:

Victoria reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.Net cash flows from operations were $2,204 million.Calculate the cash flow on total assets ratio.

To be classified as a cash equivalent,the only criterion an item must meet is that it must be readily convertible to a liquid asset.

An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers,including expenditures related to administering the business,are classified as:

Which of the following is included in the cash flows from financing activities section of the statement of cash flows?

Financing activities include receiving cash from issuing debt and paying cash dividends to shareholders.

Computing operating cash flows by adjusting accrual-based net income is done when the ________ method is used.

Northeast Inc.is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information: -Determine the amount of cash flows from operating activities using the indirect method:

When preparing the operating activities section of the statement of cash flows using the indirect method,depreciation is added back to net income.

The purchase of a long-term asset using a long-term note payable is an example of a noncash investing and financing activity,which should be disclosed in a note or separate schedule.

Cash flows from collections on credit sales are usually reported in the statement of cash flows as part of:

All of the following are true regarding the statement of cash flows except:

Rowan,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method.

Citi Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The amount of cash paid for dividends was:

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters